Looking for referrals of DSCR lenders

Wilmington, Delaware
Classifieds
2yFollow

Looking for referrals of DSCR lenders

Tianyi Chen
Member since 2018 · 11 posts · 6 votes

I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?

4Reply
35 views

Most Popular Reply

Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
2y

Hi Tianyi,

In terms of the rehab money, you could go about this in a couple of ways - use cash, bridge loan, cash out refinance or HELOCs.

More than happy to connect and answer any questions.

310-848-9776
2Reply
See this reply in the discussion

28 Replies

Jump to latestLatest
  • River SavaPro Member
    Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
    2y
    Quote from @Tianyi Chen:

    I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

    Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?

    Hi Tianyi - Happy to point you in the right direction. Very familiar with the strategy / switch into non conventional. Sending you a dm to connect!
    [email protected]
    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    Would be happy to assist you with any questions you may have with the financing process . We specialize in bridge, fix and flip, ground up construction and DSCR . No income No doc

    0Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 495 posts · 130 votes
    2y
    Quote from @Tianyi Chen:

    I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

    Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?

    If we can help with the refi when the work is done, please reach out!
    0Reply
  • Ko KashiwagiPro Member
    Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
    2y

    Hi Tianyi,

    In terms of the rehab money, you could go about this in a couple of ways - use cash, bridge loan, cash out refinance or HELOCs.

    More than happy to connect and answer any questions.

    310-848-9776
    2Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    2y
    Quote from @Tianyi Chen:

    I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

    Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?


     You have lots of good options for financing on BP. I recommend utilizing a commercial / investment focused broker who can easily show you the important differences and details amongst a wide variety of lenders to help you locate the best terms for your situation.

    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
    WebsiteView Page
    2Reply
  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    2y

    @Tianyi Chen, the HELOC you mention will be much easier and cheaper if it is on your primary residence. I really like Navy Federal, as it offers a long draw period and a long repayment period.

    I got tired of jumping through the hoops for conventional mortgages, specifically with the large amount of reserves required with those mortgages.  By the time I had six months saved up, I’d rather use that for a down payment than to keep as perpetual reserves.  Yes, I keep an emergency fund, however the reserve requirements went through the roof a few years ago.  So, I buy with seller financing when I can and remodel.  Then I look to refinance later.  

    I have used a number of DSCR lenders. I started with Mofin (and chose to sell the house instead of refinance), have completed financing with LendingOne, my STRs were financed with RCN brokered with @Timothy Hero, and LTR with Visio.  

    Any questions? 

    1Reply
  • Tianyi Chen
    OP
    Member since 2018 · 11 posts · 6 votes
    2y
    Quote from @Kerry Baird:

    @Tianyi Chen, the HELOC you mention will be much easier and cheaper if it is on your primary residence. I really like Navy Federal, as it offers a long draw period and a long repayment period.

    I got tired of jumping through the hoops for conventional mortgages, specifically with the large amount of reserves required with those mortgages.  By the time I had six months saved up, I’d rather use that for a down payment than to keep as perpetual reserves.  Yes, I keep an emergency fund, however the reserve requirements went through the roof a few years ago.  So, I buy with seller financing when I can and remodel.  Then I look to refinance later.  

    I have used a number of DSCR lenders. I started with Mofin (and chose to sell the house instead of refinance), have completed financing with LendingOne, my STRs were financed with RCN brokered with @Timothy Hero, and LTR with Visio.  

    Any questions? 


     Thanks for the suggestions.  I read books on creative financing like seller financing and subject 2.  I really like the idea but it seems that to get these leads, it will involve a lot of work.  My wife and I have our own business.  In your case, are you full time real estate investor?

    0Reply
  • Joe Dillamore
    Lender · Greenville, SC · Member since 2023 · 39 posts · 6 votes
    2y

    @Tianyi Chen HELOC + Hard Money --> DSCR is a well trodden path. You just want to ensure that you're adding enough value to the property to cover the cost of the short-term financing

    0Reply
  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    2y

    @Tianyi Chen, my husband has a W-2 job and I raise our kids and manage the portfolio.  I like to source, buy, renovate and rent or sell.  My bio has all of our deals, many of which were sub2 or other seller financing.

    0Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 651 posts · 314 votes
    2y
    Quote from @Tianyi Chen:

    I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

    Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?


    Tianyi,

    I think using a combination of HELOC funds + Delayed financing would help you accomplish what you are looking to do.

    If you utilize a HELOC with a few of your properties, you can maintain the rate/payment that you are sitting at while utilizing the negotiating power of liquid capital.

    Then, the idea is that you come behind the purchase and do a 'Delayed Purchase' which would reimburse you 75-80% of the purchase price, get you that initial capital back, and clean up any title/entity work you might need. The downside is that you would have to pay for a second closing, but it provides quite a bit of capacity and flexibility to my clients that utilize it.

    I hope that helps, good luck!

    [email protected]417-427-2612
    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Tianyi Chen:

    I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

    Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?


     Hi Tianyi, 

    If you are having issues qualifying for a full doc HELOC, There are now options to do a second mortgage qualifying with DSCR only. You may use both longterm or short term rents to qualify

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 494 votes
    2y

    HELOCs are hard to find for investment properties and second closed end mortgages on investment properties have high rates in the 10-12's (even with good credit, etc). The rate is based on that the lender sees is a borrower is more likely to have a investment property go into foreclosure compared to a primary home so the lender sees a higher risk of non payment and less likely to get any money after the first mortgage holder is paid off from the foreclosure sale. 

    It is easier and cheaper to take out a HELOC on your primary home depending on the details of draw periods etc.

    Depending on your market, cash may not be necessary to win bids. This isn't 2021. There is a lot less competition right now generally speaking. There are borrowers who are using seller credits to buy down their rate and financing the deal. Once again, it depends on your specific market so important to know the market you're buying in regarding the supply and demand. 

    You can also pay in cash and do delayed financing where you pull the cash out and put a mortgage on the property after closing.

    Regarding DSCR loans- generally better terms and rates on 1-4 units.

    More info on DSCR loans in case helpful:

    DSCR loans won't use your income to underwrite the loan.

    DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    Happy to connect to discuss further.

    [email protected]818-770-0340
    Bright Skyline518 Reviews
    WebsiteView Page
    0Reply
  • Ammabelle Canoy
    Member since 2024 · 33 posts · 3 votes
    2y

    hi, congrats on all of your success and equity. its going to be tricky to pull money out via HELOC on a rental. those tend to be tricky to find. depending on if you are willing, a DSCR refi might be a good bet to get that equity out and keep investing. even if you are paying a higher rate with the new loan you should be able to more than makeup that difference in the return on that money in the new investments

    0Reply
  • Alex Hunt
    Lender · Member since 2022 · 441 posts · 134 votes
    2y

    Happy connect on all the loan types you mentioned! Check with multiple lenders and sort through the options that are best for you

    0Reply
  • Michael Masters
    Rental Property Investor · Westport, CT · Member since 2017 · 176 posts · 183 votes
    2y
    Quote from @Tianyi Chen:

    I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.

    Question: can anyone refer us some good lenders for the loan we are looking for?  Is there any other suggestions on our strategy?

    I personally use Freddie Mac for my DSCR loans as they have cheaper rates.  However, they have conservative underwriting rules.  I found their rates posted here (scroll down):

    https://www.walkerdunlop.com/specialties-sectors/small-balan...

    If you want more info, DM me.

    0Reply
  • Salvador Auciello
    Lender · Irvine CA · Member since 2019 · 71 posts · 22 votes
    2y

    Heloc on primary First Citizens bank would give you a heloc at 5.99% rate for the first yea.  on your primary. However it is very small loan like $100k

    You can do DSCR loans or portfolio loans to access the funds. Bridge loans fix and flip loans

    delayed financing. 

    0Reply
  • Tyler Warrick
    Lender · Chandler, AZ · Member since 2023 · 88 posts · 48 votes
    2y

    @Tianyi Chen great work! Assuming you don't have 10+ financed properties, an "All in One" loan might be a serious contender for you. It's essentially a first position HELOC. With close to $2M in equity across 12 properties, I would assume you cash flow like crazy. This could be a ridiculously good option to have access to quick cash and wouldn't hurt your cash flow.

    Feel free to DM/reply for more info. I'm sure others would like to see the details :) 

    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes
    2y

    Sent you a PM Tianyi

    0Reply
  • Jonathan Taylor
    Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
    2y

    @Tianyi Chen are you asking for a HELOC on your investment properties? If so, these are uncommon and not a standardized product. If you are asking about DSCR cash out refis, you can find lenders on the find a lender tool or ask more questions here. Happy to help as I specialize in these types of loans as well.

    0Reply
  • Colin McMahon
    Lender · Miami · Member since 2022 · 99 posts · 18 votes
    2y

    Hi Tianyi,

    The best option would be to get a cash-out DSCR loan on the investment properties. It will be a closed-end mortgage and not a HELOC, but you will get a better rate and have more financing options. I'll send you a PM so we can connect further.

    0Reply
  • Brandon Croucier
    Lender · Nashville, TN · Member since 2024 · 700 posts · 284 votes
    2y

    Hi Tianyi,

    We can definently assist you, let's connect so I can understand your needs a bit more in depth!

    0Reply
  • Katie Smith
    Member since 2023 · 347 posts · 190 votes
    2y

    HI Tianyi! Sounds like you and your wife are pretty savvy in r.e investing. 

    I would love to hear more about your goals and how many rentals you are looking to have by the end of the year. I'd recommend connecting with a direct lender that is a broker as well, so they can offer you multiple options. Im going to send you a dm. 

    0Reply
  • David RossBusiness Member
    Lender · Henderson, NV · Member since 2023 · 32 posts · 8 votes
    2y

    Hey Tianyi!

    My team specializes in DSCR and can finance up to 8 units. I will post some additional Highlights below. If you want a free consultation, please schedule a time with me below and we can connect.

    https://bit.ly/Meet--David

    DSCR Highlights:

    • • Interest-only available
    • • Cash-out options
    • • Can close as corporation or LLC
    • • Unlimited number of financed properties
    • • Only LTV, FICO, and DSCR required
    • • Loan amounts between $100k - $3.5mm
    • • LTVs up to 80%
    • • FICO down to 640
    • • 1-4 unit residential, 5-8 unit residential, 2-8 unit mixed use, condo and condotel
    [email protected]702-483-8122
    Cardinal Financial - David Ross4.9262 Reviews
    WebsiteView Page
    0Reply
  • David RossBusiness Member
    Lender · Henderson, NV · Member since 2023 · 32 posts · 8 votes
    2y

    Hi Tianyi,

    My team specializes in these and can finance up to 8 units and there are even some additional options available to help you cash flow the property. If you want a free consultation, please schedule a time with me below and we can connect.

    https://bit.ly/Meet--David

    DSCR Highlights:

    • • Interest-only available
    • • Cash-out options
    • • Can close as corporation or LLC
    • • Unlimited number of financed properties
    • • Only LTV, FICO, and DSCR required
    • • Loan amounts between $100k - $3.5mm
    • • LTVs up to 80%
    • • FICO down to 640
    • • 1-4 unit residential, 5-8 unit residential, 2-8 unit mixed use, condo and condotel
    [email protected]702-483-8122
    Cardinal Financial - David Ross4.9262 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free